China Fashion Industry’s Great Divide
These days China’s fashion and luxury market plus Chinese consumers and their growing propensity to spend are hot topics around the world. As English language media tends to only focus on foreign fashion brand activity, most observers are unaware of the massive divide between the domestic and international fashion industry in China. After attending a variety of events this week in Beijing, it was apparent how pronounced this divide is. Its almost as if there are two completely separate fashion industries operating in China.
To celebrate the opening of a host of new stores including Lane Crawford, Roger Vivier, Jitrois and Celine, the Beijing Yintai Centre held special Monday night event for selected fashion industry guests and customers. While not a massive event, the Yintai Fashion Night encouraged high-end consumers to visit the new stores and mix and mingle over champagne and DJ music.
With a similar tone, yet much larger scale, Tuesday night saw the Beijing’s Park Hyatt Hotal host the 120th anniversary of Vogue magazine worldwide and the 7th anniversary of Vogue China. Attending the black tie event were hundreds of global fashion industry executives, brand CEOs, high profile designers including Christopher Bailey and Jason Wu, photographer Mario Testino plus Chinese celebrities and other people integral to Vogue’s success globally and in China.
Meanwhile, just a few miles away at the Beijing Hotel and the D-Park Creative Zone, hundreds of Chinese domestic fashion industry leaders, VIPs and Chinese celebrities had been gathering every day and night this week for China Fashion Week shows and surrounding events.
With so many fashion related activities on this week in Beijing, one would assume some cross over and that at least some people in the industry would be involved in all Yintai, Vogue and CFW events. However, this wasn’t the case at all and it was astounding how little cross-pollination there was and only a handful of people in Beijing would have been aware of, let alone attended all these major fashion events.
So why is China’s fashion industry so divided? It has to do with the way the market has evolved.
Although some brands such as Louis Vuitton and Zegna have been in China for 20 years, the majority of international brands and media have all come in the in the last 10 years and experienced rapid growth only in the last five. When these brands started to come in, China’s fashion market, media, malls and infrastructure were underdeveloped, forcing international fashion companies to forge their own paths and start to create their own micro industry.
With their retailing, branding and marketing expertise, it didn’t take long for the foreign brands to stand out and attract consumer’s attention. As more foreign brands spilled into China their momentum increased and the divide between them and Chinese domestic brands and industry became bigger and bigger. To ride the wave, new mall operators in China began to tout big international brands to their malls and so now almost all new malls in China offer the best locations to international brands.
While international retailers are definitely better at branding and getting attention in China, its doesn’t necessarily mean they are more successful. Its all a matter of perspective. This week I was asked if Metersbonwe – China’s most prolific fast fashion brand could compete with the likes of Zara and H&M who are ranked in the worlds top 100 brands. While Metersbonwe doesn’t have that global brand recognition, in China they already have 4000 stores compared to less than 100 for H&M, or only one store for Forever 21. Therefore, in terms of China retailing power, Metersbonwe is way ahead of all the competition.
Although China as a country is a top priority for retailers, China Fashion Week (CFW) itself doesn’t garner much attention from the rest of the world. Unlike the major fashion weeks in New York and Paris etc. that influence global fashion, CFW is concentrates on domestic designers, media, shopping mall operators and VIP customers. Moreover, as there are no Buyers in China, fashion shows are not a fundamental aspect in the marketing or merchandising of collections in China.
CFW is run by the China Fashion Association (CFA). To the CFA’s credit they are aware that CFW still has room to develop. They are working hard to strengthen the entire fashion industry and create a viable ecosystem of fashion education and training etc., not just trying to get international attention as the primary indicator of success.
As Chinese designers continue to improve and start appearing on the world stage they will attract more attention. Within a few years CFW could well become the platform for China’s famous designers to-be to get their start.
While the industry divide seems odd, it makes sense once you understand the different market forces and what domestic and international fashion companies are trying to achieve. One side is not better than the other and perhaps in the future as China’s market becomes increasingly sophisticated the two sides will converge.